IV.

Financial Study

a. Project Cost

Table shows below the total project cost of the proposed business. Out of the

total project cost amounting to ₱54,335.89, the allocation for the purchase of asset is

₱6,532.00. ₱39,862.47 will be for the working capital to purchase raw materials, pay

direct labor and manufacturing overhead for one-month operation, ₱1,109.00 will be for

the operating expenses and ₱4,245.00 will be for the pre-operating expenses. The

business will have a 5% contingency allowance of ₱2,587.42.

Pili Pulp Yema Spread

One Month Operation

Accounts Sub-Total Total

A. Asset
Equipment (App. E) ₱6,532.00
B. Working Capital (1 Month)
₱13,188.00
Raw Materials (App. F)
7,200.00
Direct Labor (App. C)
Manufacturing Overhead 4,200.00
Indirect Labor (App. C) 2,204.75
Production Tools and Utensils (App. A) 9,120.00
Packaging Expense (App. B) 928.00
Miscellaneous Expense (App. I) 880.00
SSS Contribution (App. L) 300.00
PAG-IBIG Contribution (App L) 450.00 39,862.47
PhilHealth Contribution (App L) 1,391.72
Utility Expense (App. K)
C. Operating Expenses 169.00 1,109.00
Office Supplies Expense (App. D) 240.00
Communication Expense (App. H) 700.00 4,245.00
Advertising Expense (App. G)
D. Pre-Operating Expenses
Permits and Licenses (App J) 51,748.47
Total Cost 2,587.42
Contingency Allowance (5%) ₱54,335.89
Total Project Cost
 b. Sources of Financing

For the first month operation, the proposed business needs an amount of fifty-

four thousand three hundred thirty-five and eighty-nine cents (₱54,335.89). The

proponent will have an initial investment of sixty thousand (₱60,000.00) and forty

thousand (₱20,000.00) of it will be the equity of the proponent and the remaining

amount of twenty thousand (₱40,000.00) will be loaned from relatives payable for 5

years with an interest of 5% per year.

Amortization
Year Principal1 Interest2 Payment3 Outstanding
Balance4
₱40,000.00
2022 40,000.00 2,000.00 42,000.00 -
1
Total Loan/5 years
2
I=PRT
3
Principal + Interest
4
Outstanding Balance – Annual Amortization to Principal

c. Projected Financial Statement

c.1. Projected Profit and Loss Statement

Table 16 shows the expected profit and loss statements for the year 2022. The

proposed project has a net income of 173,008.50 in 2013.

Table 16

Pili Pulp Yema Spread

Projected Profit and Loss Statement
For the Year Ended December 31, 2022

Account 2022
Sales (Sch.1) ₱633,600.00
Less: Sales Return and Allowances (2%) 12,672.00
Sales Discount (2%) 12,672.00
Net Sales 608,256.00
Less Cost of Goods Sold
Purchases (sch.9) 158,256.00
Add Raw Materials Inventory, Beg. -
Total Raw Materials Available for use 158,256.00
Less Raw Materials Inventory, End. (2%) 3,165.12
Raw Materials Used 155,090.90
Add: Direct Labor (sch.5) 86,400.00
Manufacturing Overhead Applied
Indirect Labor (Sch.5) 50,400.00
Packaging Expense (sch.4) 109,440.00
Utilities Expense (sch.10) 16,700.64
Miscellaneous Expense (sch.12) 1,192.00
Production Tools and Utensils (sch.3) 2,204.75
SSS Contribution (App. L) 10,510.00
PhilHealth Contribution (App. L) 5,400.00
PAG-IBIG Contribution (App. L) 3,600.00
Depreciation Expense (Sch..8) 1,849.53
Total Manufacturing Overhead 201,296.92
Total Manufacturing Cost 442,787.92
Add: Work in Process Inventory, Beg. -
Total Cost of Goods Sold Placed in Process 442,787.92
Less: Work in Process Inventory, End. (2%) 8,855.80
Cost of Goods Manufactured 433,932.10
Add: Finished Goods Inventory, Beg. -
Total Goods Available for Sale 433,932.10
Less: Finished Goods Inventory, End. (2%) 8,678.60
Total Cost of Goods Sold 425,253.50
Gross Profit 183,002.50
Less: Operating Expense
Permits and Licenses (App. J) 4,245.00
Advertising Expense (Sch.7) 700.00
Office Supplies Expense (sch.6) 169.00
Communication Expense (sch.11) 2,880.00
Interest Expense (Table 15) 2,000.00
Total Operating Expense 9,994.00
Income before Income Tax 173,008.50
Tax Due -
Net Income After Income Tax ₱173,008.50

c.2. Projected Cash Flow Statement

Table 17
 Pili Pulp Yema Spread
Projected Cash Flow Statement
For Period Ended December 31, 2022

Account Pre-Operating 2022

Cash Inflow:
Cash Contribution ₱20,000.00
Proceed from Loan 40,000.00
- ₱8,420.53
Cash Balnce, Beg.
- 608,256.00
Add: Cash Sales

Total Cash Inflow 60,000.00 616,676.53

Less: Cash Outflow
Equipment (App. E) 6,532.00 -
Raw Materials Purchases (App. F) 13,188.00 145,068.00
Direct Labor (App. C) 7,200.00 79,200.00
Indirect Labor (App. C) 4,200.00 46,200.00
Prod. Tools and Utensils (App. A) 2,204.75 -
Packaging Expense (App. B) 9,120.00 100,320.00
Utilities Expense (App. K) 1,391.72 15,308.92
Miscellaneous Expense (App. I) 928.00
880.00 9,680.00
SSS Contribution (App. L)
450.00 4,950.00
PhilHealth Contribution (App. L)
300.00 3,300.00
PAG-IBIG Contribution (App. L)
4,245.00 -
Permits and Licenses (App. J)
700.00 -
Advertising Expense (App. G)
240.00 2,640.00
Communication Expense (App. H)
- 2,000.00
Interest Expense (Table 15)
- 40,000.00
Loan Amortization (Table 15)
- -
Provision on Tax (Sched 14)
Total Cash Outflow 51,579.47 448,666.92
Cash Balance, Ending 8,420.53 168,009.61

Schedule 1
Projected Sales and Discounts

Year Production Selling Price Sales Sales Net Sales

Capacity Discounts
2022 7,200.00 ₱88.00 ₱633,600.00 ₱12,672.00 ₱620,328
1
Sales = Production Capacity x Selling Price
2
Sales Discount = Sales x 2%
3
Net Sales = Sales – Sales Discounts

Schedule 3
 Projected Production Tools and Utensils

Description 2022
Measuring Cups ₱104.75
Measuring Spoon 60.00
Mixing Bowl 540.00
Wooden Spoon 60.00
Stainless Steel Casserole Pot 1,440.00
Total ₱2,204.75

Schedule 4
Projected Packaging Expense

Description 2022
Sticker Paper (for labeling) ₱5,760.00
Shrinkable Plastic Sealer 2,880.00
250 ml Glass Jar 100,800
Total ₱109,440.00

Schedule 5
Projected Direct and Indirect Labor

Description 2022
Worker ₱86,400.00
Manager 50,400.00

Schedule 6
Projected Office Supplies

Description 2022
Record Book ₱39.00
Calculator 120.00
Ball Pen 10.00
Total ₱169.00
Schedule 7
Projected Advertising Expense

Description Per Cycle 2022

 Tarpaulin ₱350.00 ₱700.00

Schedule 8
Depreciation Expense

Description Acquisition Estimated Life Annual 2022

Depreciation
0 3 Burner Gas ₱3,416.00 5 ₱683.20 ₱683.20
Stove Glass
Top
LPG Tank 2,350.00 3 783.33 783.33
Electric Hot Air 383.00 1 383.00 383.00
Gun Sealer
Total ₱1,849.53

Schedule 9
Projected Raw Materials Purchases

Description 2022
Pili Fruit ₱86,400.00
Condensed Milk 40,320.00
White Sugar 6,480.00
Butter 7,776.00
Egg yolks 15,120.00
Lemon Fruit (juice) 2,160.00
Total ₱158,256.00

Schedule 10
Projected Utilities Expense

Description 2022
Bulb ₱2,371.68
Gun Hot Air Bottle Sealer 12,648.96
Water Consumption 1,680.00
Total ₱16,700.64

Schedule 11
 Projected Communication Expense

Description 2022
Load ₱2,880.00

Schedule 12
Projected Miscellaneous Expense

Description 2022
Dishwashing liquid ₱120.00
Sponge 60.00
Hand Gloves 45.00
Face Mask 108.00
Apron 75.00
Soft broom 60.00
Dust Pan 50.00
Hairnet 24.00
Table 400.00
Trashcan 100.00
Chair 150.00
Total ₱1,192.00

Schedule 13
Tax Table
2022 Net Profit Before Tax ₱183,002.50
Less: Personal Exemption 50,000.00
Tax Table Income 133,002.5

Appendix A

Production Tools and Utensils

Quantity Description Unit Cost Amount

1 set Measuring Cups ₱104.75 ₱104.75
1 set Measuring Spoon 60.00 60.00
4 units Mixing Bowl 135.00 540.00
2 units Wooden Spoon 30.00 60.00
 2 units Stainless Steel Casserole 720.00 1,440.00
Pot
₱2,204.75

Appendix B

Packaging Expense

Quantity Description Unit Price Daily Weekly Monthly

1 bundle Sticker ₱40.00 ₱40.00 ₱120.00 ₱480.00
(50 pcs) Paper(for
labeling)
1 bundle Shrinkable 20.00 20.00 60.00 240.00
(50 pcs) Plastic Sealer
50 pcs 250 ml Glass 14.00 700.00 2,100.00 8,400.00
Jar
₱760.00 ₱2,280.00 ₱9,120.00
1
Quantity x Unit Cost
2
Total Cost x 3 days x 4 weeks

Appendix C

Direct and Indirect Labor

Description No. of Rate Per Daily Weekly Monthly

Employee Day
Worker 2 ₱300.00 600.00 1,800.00 ₱7,200.00
(Direct Labor)

Manager 1 350.00 350.00 1,050.00 ₱4,200.00

(Indirect
Labor)
1
No. of Personnel x Rate per Day x Working Days
2
Weekly x 4 weeks

Appendix D
 Office Supplies Expense

Quantity Description Unit Cost Monthly

1 pc Record Book ₱39.00 ₱39.00
1 pc Calculator 120.00 120.00
2 pcs Ball Pen 5.00 10.00
Total ₱169.00

Appendix E

Manufacturing Equipment

Quantity Description Unit Cost Amount

1 unit Hanabishi 3 Burner ₱3,416.00 ₱3,416.00
Gas Stove Glass Top
1 unit LPG Tank (with 2,350.00 2,350.00
content)
2 unit Electric Hot Air Gun 383.00 766.00
Sealer
Total ₱6,149.00 ₱6,532.00
1
Quantity x Unit Cost

Appendix F

Raw Materials Purchases

Quantity Description Unit Price Daily Weekly Monthly

20 kilos Pili Fruit ₱30.00 ₱600.00 ₱1,800.00 ₱7,200.00
8 units Condensed 35.00 280.00 840.00 3,360.00
Milk
1/2 kilo White Sugar 45.00 45.00 135.00 540.00
1 unit Butter 54.00 54.00 162.00 648.00
15 pcs Egg yolks 7.00 105.00 315.00 1,260.00
1 pc Lemon Fruit 15.00 15.00 45.00 180.00
(juice)
Total ₱1,099.00 ₱3,297.00 ₱13,188.00
1
Total Cost x 3 days
2
Weekly x 4 weeks
 Appendix G

Advertising Expense

Quantity Description Unit Cost Monthly

2 Tarpaulin ₱350.00 ₱700.00
1
Quantity x Unit Cost

Appendix H

Communication Expense

Description No. of Days Unit Cost Monthly

Mobile Load 3 ₱20.00 ₱240.00
1
Weekly x 4 weeks

Appendix I

Miscellaneous Expenses

Quantity Description Unit Cost Monthly

Dishwashing liquid ₱10.00
2 Sponge 5.00
1 Hand Gloves ₱5.00 45.00
3 Face Mask 5.00 9.00
3 Apron 15.00 75.00
Soft broom 3.00 60.00
3 Dust Pan 25.00 50.00
1 Hairnet 60.00 24.00
1 Table 50.00 400.00
3 Trashcan 8.00 100.00
1 Chair 400.00 150.00
100.00
1 50.00
3
 Total Cost ₱928.00
1
Quantity x Cost

Appendix J

Permits and Licenses

Fees and Charges Amount

Mayors Permit ₱ 1500.00
Sanitary Inspection 150.00
Health Certification 150.00
Fire Clearance 150.00
Business Plate Number 250.00
Stickers 30.00
BIR Permit 1,800.00
DTI Permit 215.00
Total Cost ₱ 4,245.00

Appendix K

Utilities Expense

Descriti Qt Rated Freq. Daily Rate Total Monthl Monthly

on y. Capac of Electrici per Daily y Electricity
ity utilizati ty kwh3 Electricity Utilizati Consumpt
(kwh)1 on per Consum Consumpt on ion
day ption ion (day)4 (Peso)5
(hr/ (kwh)2 (Peso)
day)
Bulb, 3 0.15 10 1.5 10.98 ₱16.47 12 ₱ 197.64
50 watt hrs/da days
y
Gun 2 4 2 8 10.98 ₱87.84 12 ₱1,054.08
Hot Air hours/ days
Bottle day
Sealer,
2000
watts
 Water ₱ 140.00
Consu
mption
₱1,391.72
1Rated capacity = wattage ÷ 1,000 x qty.

2Daily Elec. consumption = freq. of utilization per day x rated capacity

3Rate per kwh = Total amount paid for 1 month ÷ Total electricity consumption in kwh (P2,041.50/186)

4 Total daily electricity consumption = Daily electricity consumption x rate per kwh

5Monhtly utilization = 12 days per month @ 10 hours per day

6Monhtly electricity consumption = Daily electricity consumption x 12 days

Appendix L

SSS, PAG-IBIG, PhilHealth Contribution

Description Monthly
SSS Contribution
Manager ₱ 320.00
Worker 560.00
Total Contribution ₱ 880.00
PAG-IBIG Contribution
Manager ₱ 100.00
Worker 200.00
Total Contribution ₱ 300.00
PhilHealth Contribution
Manager ₱ 150.00
Worker 300.00
Total Contribution ₱ 450.00

Note:
1
The SSS contribution rate is 12%, 4% for the employee and 8% for the employer. (based on 2020 SSS salary contribution table)
2
₱200.00 monthly PAG-IBIG contribution, ₱100.00 for employee share and ₱100.00 for employer share. (50% share for the
employee and 50% share for the employer)
3
For the year 2020, the PhilHealth contribution for employee with a ₱10,000.00 and below monthly salary is ₱300.00, 150 pesos for
the employee share and 150 for the employer share. (3% premium rate, 1.50% for the employee and 1.50% for the employer).